ANNAPOLIS, Md. &

President Bush declared today that the time is right to relaunch Mideast peace talks to create a Palestinian state because "a battle is under way for the future" of the troubled region.




In remarks prepared for the U.S.-arranged Annapolis Mideast peace conference, Bush said peacemaking at this juncture of history is an opportunity that cannot be missed. He said it won't be easy to achieve the goal of creating two states &

Israel and Palestine &

living side by side in peace after decades of conflict and bloodshed, but also said the two sides nevertheless must work together for the sake of their people.




"Today, Palestinians and Israelis each understand that helping the other to realize their aspirations is the key to realizing their own, and both require an independent, democratic, viable Palestinian state," Bush said in remarks he was making later this morning. According to excerpts of his speech released by the White House, he said, "Such a state will provide Palestinians with the chance to lead lives of freedom, purpose and dignity. And such a state will help provide Israelis with something they have been seeking for generations: to live in peace with their neighbors."




After months of frantic diplomacy, top officials from more than 40 nations were converging on this historic state capital to try to get commitments for the first formal Israeli-Palestinian peace talks in seven years.




The Bush administration has been buffeted by skepticism over prospects that the Annapolis Conference can set the stage for the creation of a Palestinian state by the end of Bush's second term in early 2009. Because of this, administration officials from the president on down have sought to minimize expectations for any major breakthrough here. But they also insist that the exercise is not futile.




Bush, who met separately with Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas on Monday ahead of the conference, said the purpose of Annapolis is to not only restart talks, but also gain support from the Arab world and the international community for the hard work ahead. Saudi Arabia and Syria &

key players &

are among 16 Arab nations attending the conference.




"Our purpose here in Annapolis is not to conclude an agreement. Rather, it is to launch negotiations between the Israelis and Palestinians," Bush said. "For the rest of us, our job is to encourage the parties in this effort and to give them the support they need to succeed."




For all the high-anxiety surrounding this conference, there were lighter moments as well &

the kind of intervals typified by the so-called "class picture" gatherings of world leaders engaged in high summitry.




At one point this morning, Bush, Olmert and Abbas stepped out of the superintendent's quarters building at the U.S., Naval Academy and waved to media representatives staking out the event nearby. Bush, who was in the middle of the two leaders, exclaimed: "Good morning everybody. Thank you. It's a beautiful day here."




He declined to answer a question about what he hoped to accomplish at the conference.




In his prepared remarks, though, the president laid out the reasons he said now is the right time to pursue a Mideast peace settlement &

something he and the Israeli and Palestinians leaders said they would like to achieve before the U.S. president leaves office in January 2009.




"First, the time is right because Palestinians and Israelis have leaders who are determined to achieve peace," Bush said. "Second, the time is right because a battle is under way for the future of the Middle East and we must not cede victory to the extremists. Third, the time is right because the world understands the urgency of supporting these negotiations."




Despite Bush's lofty rhetoric, Secretary of State Condoleezza Rice had still not managed to broker an agreement on the conference centerpiece, a joint document or "workplan" on new talks &

what the two sides must do going forward.




Rice has been meeting with the chief negotiators for two days to try and bridge the gaps.




Chief Palestinian negotiator Ahmed Qureia said today that negotiations are continuing in hopes of reaching agreement on a joint document. "The efforts are still going on, but we don't have much time," Qureia said after arriving at Annapolis with Abbas.




A member of the Palestinian delegation, speaking on condition on anonymity because talks were still going on, said three main obstacles have emerged:




"&

162; All sides have agreed that two states should be established, but the Palestinians have objected to referring to Israel as a "Jewish state." The Palestinians and their Arab backers are concerned that a specific reference to a Jewish state would prejudice the right of Palestinians who claim a right to return to land they once owned inside Israel.




"&

162; American and Israeli officials are resisting Palestinian efforts to include language about "ending the occupation that started in 1967," a reference to disputed Jewish settlements in the West Bank. The West Bank would form the bulk of an eventual Palestinian state and the two sides must decide which settlements would remain a part of Israel.




"&

162; The Palestinians want the document to set a one-year timetable for reaching a resolution. The Israelis do not want this, and the Americans are open the idea.